Evening Report (VIP) -- September 24, 2013

SOYBEAN PLANTING SLOW TO BEGIN IN BRAZIL... South American crop consultant Dr. Michael Cordonnier says while farmers in southern Brazil have begun planting full-season corn, producers have been slow to begin soybean planting because of hot and dry conditions in northern growing areas of central Brazil.

"Conditions in central Brazil probably will not favor much soybean planting this week, but the planting pace might pick up a little in southern Brazil," says Dr. Cordonnier, adding he doesn't think planting will pick up until October.

Dr. Cordonnier currently pegs Brazilian soybean production at 88 MMT. He says some private estimates are even higher, but he will remain conservative before planting becomes active. He expects soybean acreage to be up 4.7% compared to last year. Meanwhile, he pegs the Brazilian corn crop at 72 MMT on about a 6% reduction in acreage due to more attractive soybean prices.

Dr. Cordonnier estimates Argentine soybean production at 55 MMT, with acreage expected to be up around 1 million hectares from last year. He pegs the Argentine corn crop at 25 MMT, with acreage expected to be down around 8% from last year due to expansion of soybeans.

Below are Dr. Cordonnier's full South American crop estimates. He currently expects soybean production to increase by 8.5% from last year and for corn production to be down 9.9% from year-ago.

Dr. Cordonnier 2013-14 Soybean Estimates

Est.

Maximum

Minimum

2012-13

in million metric tons

Brazil

88.0

90.0

83.0

82.0

Argentina

55.0

57.0

51.0

49.5

Paraguay

10.0

11.0

9.0

9.3

Bolivia

2.6

2.9

2.2

2.6

Uruguay

3.2

3.5

2.8

3.0

Total

158.8

164.4

148.0

146.4

Dr. Cordonnier 2013-14
Corn Estimates

Est.

Maximum

Minimum

2012-13

in million metric tons

Brazil

72.0

74.0

66.0

81.0

Argentina

25.0

27.0

23.0

26.5

Paraguay

2.5

2.8

2.1

3.0

Bolivia

0.7

0.8

0.6

0.7

Uruguay

0.4

0.5

0.3

0.4

Total

100.6

105.1

92.0

111.6

CME TO HALT DELIVERY OF CATTLE FED ZILMAX... CME Group (CME) announced beginning Oct. 7, it will no longer accept delivery of cattle fed the growth additive Zilmax against CME live cattle futures contracts.

The exchange's decision comes after Tyson Foods and Cargill Inc. said they would no longer buy cattle given Zilmax. The CME's managing director of Commodity Research and Product Development, David Lehman, told Reuters, "We are letting the market know these Zilmax cattle no longer are merchantable in our view from a contract specification perspective because they will not be accepted by a majority of our approved slaughterhouses."

SHAREHOLDERS APPROVE SHUANGHUI INTERNATIONAL'S BUY OF SMITHFIELD FOODS... Shareholders of Smithfield Foods, Inc. overwhelmingly voted in favor of a $7.1-billion deal (including debt) for China's Shuanghui International Holdings Ltd. to purchase the company. More than 96% of the votes were in favor the the transaction, accounting for roughly 76% of the company's outstanding shares of common stock.

This was the final barrier to the deal as earlier this month, the U.S. Committee on Foreign Investment (CFIUS), which examines foreign investment for potential threats to national security, gave the plan the green light. Pending closing conditions, the deal is expected to be completed by Sept. 26, 2013.

This news contributed to strength in the lean hog market today as traders expect this to expand export opportunities to China going forward. Get more details.

"I would like the CFTC to help determine whether factors other than supply and demand have been causing extraordinary volatility in the price of RINs and to what extent fraud and manipulation have been affecting the price of RINs. I am concerned that a lack of transparency in these markets has made them more susceptible to manipulation," Stabenow wrote to CFTC Chairman Gary Gensler.

The committee Stabenow chairs has jurisdiction over the CFTC and it needs to be re-authorized.

CROP INSURANCE REMAINS EXTREMELY POPULAR IN 2013... Except for indemnities, crop insurance tallies for 2013 in terms or net acres insured, premiums paid and the premium subsidy levels have all set new record marks, with only indemnities and the loss ratio still at sub-record marks. Get more details.